Abstract: Previous studies on political budget cycles (PBCs)
implicitly assume the executive has full discretion power over fiscal
policy, neglecting the role of checks and balances of the legislature.
This paper goes beyond traditional PBCs models and sheds light on
the case study of Japan, South Korea, and Taiwan over the 1988-2007
periods. Based on the results, we find no evidence of electoral impacts
on the public expenditures in South Korean and Taiwan's
congressional elections. We also noted that PBCs are found on
Taiwan-s government expenditures during our sample periods.
Furthermore, the results also show that Japan-s legislature has a
significant checks and balances on government-s expenditures.
However, empirical results show that the legislature veto player in
Taiwan neither has effect on the reduction of public expenditures, nor
has the moderating effect over Taiwan-s political budget cycles, albeit
that they are statistically insignificant.We suggest that the existence of
PBCs in Taiwan is due to a weaker systemof checks and balances. Our
conjecture is that Taiwan either has no legislative veto player or has
observed low compliance to the law during the time period examined
in our study.
Abstract: This paper develops the fiscal health index of 21 local
governments in Taiwan over the 1984 to 2010 period. A quantile
regression analysis was used to explore the extent that economic
variables, political budget cycles, and legislative checks and balances,
impact different quantiles of fiscal health index for a country over a
sample period of time. Our findings suggest that local governments at
the lower quantile are significantly benefited from political budget
cycles and the increase in central government revenues, while
legislative effective checks and balances and the increase in central
government expenditures have a significantly negative effect on local
fiscal health. When local governments are in the upper tail of the
distribution, legislative checks and balances and growth in
macroeconomics have significant and adverse effects on the fiscal
health of local governments. However, increases in central
government revenues have significant and positive effects on the
health status of local government in Taiwan.